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South African environmental taxes and investment incentives in practice

Harris, Peter-Dirk (2012-12)

Thesis (MBA)--Stellenbosch University, 2012.

Thesis

ENGLISH ABSTRACT: The South African economy is faced with a number of challenges as an upper-middle income
country that is highly resource-intensive, with an open economy. It has a number of developmental
goals that must be achieved in order to maintain environmentally conscious sustainable
development. The country will have to find pioneering ways to address the poverty problems faced
by a large proportion of its people, while still ensuring economic growth at a reduced cost to the
environment.
In an effort to promote the shift to a “green” economy, the South African state and its related
entities have developed a number of incentive programmes aimed at easing the transition. These
incentives primarily support businesses in their efforts to become more energy-efficient, or to
convert to renewable energy sources. The objective of this study is to critically evaluate what the
South African government is doing with regard to environmental instruments aimed at assisting the
country to reduce carbon emissions.
This case study follows a quantitative approach, considering the financial effects that the different
environmental instruments could have on South African manufacturers. Through the study the
researcher will be able to make certain recommendations to businesses in the manufacturing
industry who are interested in investing in renewable energy and energy efficiency. The results of
the study will also give the researcher insight into the South African environmental incentives,
which will allow him to make informed comments on the proposals that government has tabled
regarding future environmental taxes and incentives.
The research questions that the researcher tried to answer were based on the current and future
policy measures that the South African government has implemented, or will implement, in order to
move the country to a low-emissions trajectory. These policies were then also compared to
international measures in order to determine if the policies chosen by the South African
government are appropriate for the this country’s economy.
This study has led the researcher to discover a number of issues relating to the status of
environmental policy in South Africa. These discoveries have allowed him to make certain
recommendations to businesses investing in this realm, as well as to government which develops
these policy measures.
The main findings of the study are that with the assistance of the South African government and
related entities, investments in renewable energy have become viable. When considering the
current status of South African environmental policy, the researcher has also come to realise that
the country is lagging behind the rest of the world with regard to policy development. The South
African economy is unique, thus policies have to be structured in a way that will not be detrimental
to the country.